Well, it was nice while it lasted. The action by the world's central banks to prevent a death spiral in global financial markets prompted a relief rally, but it lasted just 48 hours. Now it's back to business as usual, with shares tumbling, awful economic news and banks whingeing about their bail-out terms.

In all likelihood, state intervention means there will not be an implosion of the financial system leading to a 1930s-style depression. Central banks have made it clear that they will do whatever it takes to keep markets functioning and, although not everybody has woken up to the fact yet, they mean it. But just because the worst case has been avoided does not mean that we are heading rapidly back to the world as it was 15 months ago. Far from it. Nothing that has happened this week will prevent a severe global recession, with the UK - heavily dependent on housing and finance - one of the main casualties.

Even so, there were reasons to be cheerful yesterday. One is that the Bank of England has got the message and is likely to cut interest rates aggressively over the coming months. Too late to prevent a significant rise in unemployment, of course, but welcome nonetheless.

A second is that the Treasury is adopting a relatively robust line with the banks over dividends. The time for the banks to bargain over dividend policy was last weekend, during negotiations on the structure of the bail-out. It is absurd for the banks to say now that they want the money from the state but don't like the terms. In any event, for banks that are short of capital, dividends to share-holders are a luxury they cannot afford. The priority is to build up their capital base and if they can do that without recourse to the taxpayer, then of course they should be free to pay dividends. If they can't, the public mood is so hostile towards the banks that the government may lose patience and decide that total nationalisation of the most troubled institutions is the only logical outcome. Which it could well prove to be, given the state of the markets.

The final piece of good news was the announcement yesterday by Ed Miliband, the new secretary of state for energy and climate change, that he will introduce a feed-in tariff so that those who invest in small-scale electricity generation can sell excess power back to the grid. This sends out an important signal that ministers are serious about tackling climate change and are not, like Italy or Poland, using the financial crisis to wriggle out of their commitments.

Comparisons with the 1930s cut both ways. While the outlook for growth and unemployment is far less bleak than it was in the Great Depression, there are now two other threats: climate change and peak oil. All in all, the world is in a far more precarious position than it was when Roosevelt arrived in the White House in 1933 with his New Deal, and there is a need for the same urgency that marked last week's wholly necessary recapitalisation. It can be done if, as last weekend showed, there is the will.

Earlier in the summer the New Economics Foundation put out a pamphlet calling for a Green New Deal. This called not just for tougher controls of the global financial system but for large-scale investment in renewable energy and wider environmental transformation that would create a new army of green-collar workers. The UN has latched on to the idea and will call next week for redirection of investment away from speculation and into programmes that foster natural environment. Gordon Brown is calling for a Bretton Woods II to reshape the global institutions in a post-bubble world; a Green New Deal should be the starting point for discussions.